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Lecture 2 - The Universal Principle of Risk Management: Pooling and the Hedging of Risks

This video was recorded at ECON 252 - Financial Markets. Statistics and mathematics underlie the theories of finance. Probability Theory and various distribution types are important to understanding finance. Risk management, for instance, depends on tools such as variance, standard deviation, correlation, and regression analysis. Financial analysis methods such as present values and valuing streams of payments are fundamental to understanding the time value of money and have been in practice for centuries. Reading assignment: Jeremy Siegel, Stocks for the Long Run, chapter 1 and Appendix 2 (p. 12) Resources: PowerPoint slides from screen - Lecture 2[PDF] Problem Set 1: Probability [PDF]

Keywords:: videolectures, ocwc, oec

Disciplines:

Business / Economics

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Material Type:: Open (Access) Textbook
Date Added to MERLOT:: February 10, 2015
Date Modified in MERLOT:: February 10, 2015
Author:: Robert J. Shiller, Department of Economics, Yale University
Submitter:: The Open Education Consortium
Primary Audience:: College General Ed, College Lower Division, College Upper Division
Technical Format:: Video

Mobile Compatibility:: Not specified at this time
Language:: English
Cost Involved:: No
Source Code Available:: No
Creative Commons:: This work is licensed under a Attribution-NonCommercial-NoDerivs 3.0 United States